GREENHUT: Auditing the state of our government

SACRAMENTO ---- A new report from the California State Auditor
should throw cold water on those who believe that the best way to
solve the state's problems is by expanding government power,
increasing government funding and creating new regulatory powers
and agencies.

The auditor recently released its annual report analyzing how
the various government agencies have implemented the findings from
various auditor reports over the last two years. The reports
themselves spotlight problems within government agencies, but the
beauty of the "implementation" report is that it shows that the
agencies frequently give the auditor the back of the hand and drag
their feet on fixing the financial problems spotlighted in the
audits.

The auditor's office is one of the few government agencies worth
their salt, in that its charge is to follow the public money trail.
It has no teeth to enforce its findings, so it is left hectoring
agencies to clean up their act. It does so in calm, officious tones
that, nevertheless, tell a disturbing story:

"In the reports issued during the past two years, we made 281
recommendations, of which state agencies asserted that they have
fully implemented 132 and partially implemented 88; however, for
the remaining 61 recommendations, we determined that agencies have
taken no action, did not provide a response, or corrective action
is pending."

The agencies' lack of compliance with audit recommendations is
costing the state $1.4 billion "in monetary value by reducing
costs, increasing revenues or avoiding wasteful spending,"
according to State Auditor Elaine Howle.

What if a government auditing agency, such as the Internal
Revenue Service or the Franchise Tax Board, audited private
businesses or households and found major problems with the books?
Would those agencies be content if many citizens simply ignored
their requests or complied in only a partial manner?

The report shows government agencies that can't seem to comply
with government laws and regulations. Regarding an audit of the
Veterans Home of California, the audit found that "The Veterans
Home has not assessed its compliance with Americans with
Disabilities Act requirements to ensure people with qualifying
disabilities have access to the Veterans Homes and its programs and
services ... ." The problem was only partially corrected.

Agencies that are supposed to provide oversight and inspections
sometimes failed to do so. The state Department of Health, for
instance, "is not inspecting clinical laboratories every two years,
which is required by state and is a critical component of the
state's intended oversight structure," according to the audit
report. And the department can't manage to get its fee structure
right: "Because it had raised its fees improperly one year and
failed to impose two subsequent fee increases the budget act called
for, Laboratory Services did not collect more than $1 million in
fees from laboratories." Partial corrective action was taken in
these cases.

Government officials often lecture private companies about
conflicts of interest, yet an audit found that the California
Highway Patrol does not require "employees who deal with purchasing
to make financial interest disclosures" and it doesn't consistently
follow "its procedures to annually review its employees' outside
employment" ---- something that also was partially corrected after
the 2008 audit.